SAND RECLAMATION ECONOMICS

FOR

SMALL FOUNDRIES

by David O. Kennedy, PE Simpson Technologies Corporation Aurora, Illinois USA

SAND RECLAMATION ECONOMICS FOR SMALL FOUNDRIES

MANAGEMENT SUMMARY
Foundry literature is rife with the technical aspects of sand reclamation. Indeed the technical complexity of sand reclamation is formidable, with many variables. Sand types, sizes and distributions; a plethora of binder systems; different molding/core making methods and process parameters; and, a variety of reclamation techniques make the issues extensive and complex. However, seldom are the financial costs and benefits of sand reclamation explored in any depth. When they are mentioned, the analyses are generally quite shallow and cursory. Moving from the basic premise that foundries are run to make money, not (just) castings, it follows that the ultimate decision to install sand reclamation systems is basically a financial decision, not a technical one. This paper explores the actual financial costs and investments of several foundries that have decided to make the plunge into sand reclamation. Case histories are presented of small foundries reclaiming a number of different sand types-- green sand to green sand, no-bake to nobake, core sand to core sand, and green sand to core room quality sand. A small foundry considering sand reclamation is often staggered by the amount of investment that is thought to be required. Sometimes this estimate may end up being quite insufficient to cover a complete, workable system. Other times the estimate is overstated, and the foundry is convinced it needs more equipment than really necessary to make a proper technical and financial decision. Operating cost estimates can suffer similar wide swings of reasonableness. The examples highlighted in the paper are from successful operating foundries, and not based on supplier or engineering consultant estimates. The author, working with the subject foundries, has tried to capture all of the true incremental costs and benefits of the installed systems. Central sand laundries are discussed. The economics of two large laundries are highlighted-- one in Japan and one in Europe. Other proposed, but failed laundries, will also be reviewed. Finally, some thoughts and opinions on how to attack the economic evaluation of a proposed sand reclamation system for a small foundry are examined. A bibliography of previously published articles on the economic aspects of sand reclamation is given.

INTRODUCTION
Sand reclamation is not new and neither are discussions of its economics. The oldest recorded paper on sand reclamation in the American Foundrymen's Society Transactions is 1911. In a 1952 paper describing pneumatic reclamation of steel green sands, a table was included which described the cost of reclamation then: Item Power Labor Maintenance Overhead Depreciation Total Cost $/ton1) $0.281 0.778 0.030 0.208 0.194 $1.491/ton

The article went on to say that soon the installation of a pneumatic elevator would reduce the need for the full time operator, bringing the overall cost down to less than $1.00/ton. The cost of sand from the pit through disposal was $11.22/ton. Needless to say the technology and the cost of reclamation have greatly increased over the interceding forty years. However, the technical gains have apparently often outstripped the cost analysis or business advances. If a discussion of reclamation economics is presented at all, it is generally limited to a few cursory lines at the end of a technical paper. Why this lack of financial/economic information? After all, the primary reason for a foundry's existence is not (just) to make castings, but money-- Any foundry that cannot financially justify its existence will inevitably cease operation. The answer is twofold. Most, if not all, people involved on a reclamation team come from a production/process/ engineering background, and not from a financial or business history. These folks are generally much more comfortable in dealing with the myriad of technical details surrounding sand reclamation, and not in the strange art of financial analysis. Secondly, the financial analyses that need to be performed can be as complicated as the technical aspects. A professionally responsible investment analysis cannot just be simple "plug and chug" computation. Every foundry will calculate its costs and benefits differently, and a certain methodology applicable to one foundry will not be appropriate for another. Figure 1 highlights some of the most popular process flow options available to foundries considering reclamation of their sands. Which process is best for any particular foundry is left for others to decide. This paper shall review the economics of several of these process options, understanding the caveat that what is applicable to one may not be completely transferable to another. It is the hope of the author this paper can provide greater insight to those foundries who wish to seek financially sound investments in sand reclamation.

1)

All units of currency in this paper are Australian dollars ($), unless noted to the contrary. Also, all units of weight are in metric tons (t), 2000 kgs.

GREEN SAND TO GREEN SAND RECLAMATION

One of the most cost effective reclamation systems is one that reclaims green sand back into green sand. While green sand is highly recyclable, there comes a point where contami-nation of agglomerations, fines, oolitics, dead clay, coked carbons and ash becomes a pro-blem and the sand system must be "refreshed." Traditionally this has been accomplished by making a continuous new sand addition to the system. A typical rule of thumb adds 150-250 kgs of sand per ton of metal poured (for ferrous foundries), subject to corrections being made to compensate for core sand dilution. Whatever the actual amount of new sand added, most foundries must make new sand additions to keep their system in balance. If a foundry is removing a percentage of green sand every day from the system to keep it in balance and is adding raw sand, it is a prime candidate for green sand reclamation. By pneumatically reclaiming some return green sand, the troublesome elements can be removed from the sand while the majority of valuable components are saved-- sand, live clay, and carbons. The potential savings can be substantial. Sand is much more expensive than the delivered purchase price. The sand must be off-loaded, stored, and then distributed into the foundry. Then, when the sand has reached the end of its productive life it must be segregated and collected, loaded, transported, and dumped. Sometimes the disposed sand must be treated before final disposal. All of this cost money. Cost savings can also be achieved by returning live bentonite back to the sand system rather than indiscriminately throwing it out with discarded sand. Savings include not only the live clay saved, but also the energy previously used to activate it. Also, sand properties are favorably affected because this clay is already partially activated. Any new sand would require additional clay to be added to the system (at additional cost) and then over time this clay would be activated. The foundry found in the first case history is just one foundry of many in its corporate group. All reclaim green sand back to green sand. A simplified mass flow diagram of the green sand system after reclamation is shown in Figure 2. Previous to the installation of a pneumatic reclaimer, the foundry was adding an additional 23 tpd (tons per day) of sand to the system in the form of facing sand, and was removing an equal amount to keep the system in balance. New sand used in facing sand suffers from

lack of pre-activated clay and hence lower mechanical properties. This could in turn lead to sand related defects. With the sand, valuable clay was removed from the system that ended up in the disposal pit. Today reclaimed sand goes into facing sand. Figure 3 highlights the economic analysis of this installation. Cost savings were calculated on a dollar per day basis. By forgoing the wasteful dumping, the savings were significant, even considering the depreciation and interest costs associated with the new equipment. Payback was less than six months and the project had a simplified internal rate of return of IRR=~212%! Not even a cynical foundryman can argue with that kind of return.

FIGURE 3- GREEN SAND TO GREEN SAND FOUNDRY

GENERAL DESCRIPTION
Foundry Type Product Type Production Rate Typical Sand to Metal Ratio Sand System Size Sand Type Sand Usage Year Started Capacity (tph, tpy) Actual Production (tpy) Yield (%) New Sand: Reclaimed Sand Beneficial Reuse (%) Disposal (%) Starting Product Ending Product Description of Reclamation System Purchased during Project Green Sand Steel Railroad 20 t/shift of castings 2.5:1 725 t Round Grain Silica, 85 AFS GFN 14 t/hr 1976 7.3 tph; 29,000 tpy 3.6 tph; 14,500 tpy 85.0% 0:100 0.0% 15.0% Green Sand w/ Sodium Silicate Cores Green Facing Sand Pneumatic reclaimer, feed hopper, cyclone, dust collection, and installation.

ECONOMIC EVALUATION
Sand Usage Savings (tpd) Bentonite Savings (tpd) 24.83 1.96 US$/t 41.80 44.00 85.80 104.50 US$210,000 US$/day Cost of Operation Direct Labor + Fringes Electrical Total Direct Maintenance Additional Lab Analysis New Sand Costs Reduction Disposal Cost Reduction Bentonite Cost Reduction Total Operating Cost Depreciation (2) Interest (3) TOTAL DAILY SAVINGS 58.80 161.14 219.94 37.28 58.80 -1037.89 -1092.52 -204.82 -2019.21 84.00 67.20 1868.01 $/t(1) $56.85 59.84 $116.69 $142.12 $285,714 $/day $80.00 219.24 299.24 50.72 80.00 -1412.10 -1486.42 -278.67 -2747.23 114.29 91.43 $2,541.52

Cost of New Sand (per t) Cost of Disposal (per t) Total Cost of Sand (per t) Cost of Bentonite (per t) Initial Investment

NOTES: (1) Conversion done at $1.00=US$.735 (2) Calculated at 10 years, 0% salvage, straight line method, full absorption of cost. (3) Calculated simply at 8%/year based on total investment.

NO-BAKE TO NO-BAKE RECLAMATION

Another very popular reclamation scheme is to reclaim molding sands of various no-bake binder systems back to "like new" quality and to use the reclaimed sand versus buying new sand. Often, only a pneumatic attrition type scrubber is needed to reclaim these sands. The list of sands that have been successfully reclaimed using this strategy is quite long-- furan, phenolic urethane, sodium silicate, ester cured phenolics, and polyol urethane to name a few. Complications can arise when cores of a different non-compatible binder type are used. This might lead either into a thermal-pneumatic attrition system or, in all likelihood, a change of core binder systems. Also, certain binder systems demand thermalpneumatic attrition type process, shell sand reclamation being of special note. Costs can be reduced further than just minimizing new sand purchases. As sand is rebonded, indentations into the sand grains become filled, and as sand goes through the reclamation process corners are removed from the sand. Both phenomenons can lead to reduced binder usage that can provide substantial savings. Case history two is an aluminium no-bake foundry that produces precision parts for the aerospace and motorcycle industries. Pneumatic attrition scrubbers were installed to minimize new sand purchases, avoid the ever-increasing disposal costs found in the region, and to minimize any potential controversial waste volumes. Figure 4 highlights the resultant mass flow balance of molding sand. The reclamation system has a 90% yield rate and new sand is added at a ratio of 30:70 to reclaimed sand. Figure 5 gives the relevant financial data. Costs and benefits have been calculated on a dollar per hour basis as well as a more traditional dollar per ton basis. This was done because much of the cost data was easier defined on an hourly basis versus a ton basis. Of course the conversion between the two can easily be made by factoring in sand usage on an hourly basis. Before reclamation the foundry was disposing of all of their molding sand. Therefore, the installed reclamation system included equipment from the shakeout through the ancillary utilities. Many foundries may already have some such equipment in place, and therefore the investment and operating costs assigned to the reclamation plant can be reduced. The foundry of this example purchased all goods and services related to this project with cash, therefore it did not have any interest costs associated with the investment on the foundry's book. However, for the sake of this paper, a financial cost was given for the use of the money. Regardless if the foundry borrows money or not for a project, there should be some provision in economic evaluation to cover the cost of capital. This will then cover the opportunity costs that have been foregone because the money was invested into the reclamation plant. This subject shall be covered in greater detail later in this paper. Payback for this project was approximately 2.1 years. A simplified internal rate of return yields IRR=~47%. For many foundries this would represent an attractive investment. While this foundry was not able to reduce resin consumption for a variety of reasons, other no-bake foundries have increased their returns by doing so. But, each foundry is different. Only after an initial, proper testing program during the project evaluation phase should such benefits be projected in the project's pro forma statements.

FIGURE 5-

NO-BAKE TO NO-BAKE FOUNDRY

GENERAL DESCRIPTION
Foundry Type Product Type Production Rate Typical Sand to Metal Ratio Sand System Size Sand Type Sand Usage Year Started Capacity (tph, tpy) Actual Production (tph, tpy) Yield (%) New Sand: Reclaimed Sand Beneficial Reuse (%) Disposal (%) Starting Product Ending Product Description of Reclamation System Purchased during Project No-bake aluminium Precision parts for aerospace, motorcycle, industrial 1 t/shift of castings 13:1 135 t Silica, 60 AFS GFN 2.34 t/hr 1987 2.3 tph; 9100 tpy 1.8 tph; 6400 tpy 90.0% 30:70 0.0% 10.0% Phenolic Urethane No-Bake Phenolic Urethane No-Bake Shakeout, inclined conveyor, lumpbreaker, pneumatic reclaimer, dust collection, distribution panel, and installation.

ECONOMIC EVALUATION
Before Reclamation Cost of New Sand (per t) Cost of Disposal (per t) Total Cost of Sand (per t) Sand Costs per Hour of Operation US$/t 19.80 23.10 42.90 US$100.39/hr $/t(1) $26.93 31.42 $58.34 $136.52/hr

After Reclamation Initial Investment Cost of Operation Direct Labor + Fringes Electrical Total Direct Maintenance Disposal Costs New Sand Costs Total Operating Costs Depreciation (2) Interest (3) TOTAL COST US$250,000 US$/hr 17.29 9.50 26.79 2.40 16.63 14.26 60.08 6.25 5.00 US$71.33/hr or US$30.48/t $340,000 $/hr $23.51 12.92 36.43 3.26 22.62 19.39 81.71 8.50 6.80 $97.01/hr or $41.46/t

NOTES: (1) Conversion done at $1.00=US$.735. (2) Calculated at 10 years, 0% salvage, straight line method, full absorption of cost. (3) Calculated simply at 8%/year based on total investment.

CORE SAND TO CORE SAND RECLAMATION

Another possible route to reclaiming no-bake or cold-box sands is to use the thermal reclamation process, which may or may not be followed by a pneumatic attrition step. Some foundries feel they need the type of cleaning this process flow provides, albeit at increased investment and operating costs. The foundry highlighted in Figure 6 produces aluminium automotive parts using the semi-permanent mold process. All shakeout sand is thermally reclaimed before reuse. New sand is only added to compensate for reconditioning losses, currently at 8%. The foundry hopes to reduce these losses to 4%. Economics are further enhanced by credits possible through reduced binder usage and heat recuperation. Gas costs are also reduced because of the thermal contribution to the calcining process of the residual binder found in the incoming sands. For this foundry the system paid back in about 1.7 years, and had an IRR=~60%. While the foundry found in this example did not perform any post-calcining scrubbing, most foundries find some type of scrubbing is necessary in order to remove inorganic, non-combustible contaminants. As an example, many foundry sands contain alkaline materials such as limestone, shells, etc. When these materials are calcined, calcium carbonate (CaCO3) is converted to calcium oxide (CaO) which can significantly increase the ADV (acid demand value) of the calcined sand. This elevated property could introduce new problems in making cores from this sand: if the inorganics are not removed via pneumatic scrubbing first.

GREEN SAND TO CORE SAND RECLAMATION

One of the most fruitful areas for green sand to core sand reclamation is in copper-based foundries, especially those foundries that pour lead or cadmium containing alloys. Disposal costs for lead contaminated sands have soared over the past decade. Often, these sands need to be treated before they are landfilled in an effort to "tie-up" the lead and other leachable metals. These treatments further aggravate the cost of disposal. The cost of properly disposing of lead contaminated sands has resulted in the many foundries who previously poured such alloys to stop producing castings of this metallurgy. However, for many foundries there is no option. The lead containing alloys they pour have no suitable substitute at this time, and these alloys are vital to the products produced. These foundries must either reclaim or go out of business. The brass foundry described in Figures 7 and 8 is one such example. Reclamation was required to minimize toxic waste volumes, reduce the ever-increasing costs of disposal, and to seek relief from shrinking landfill sites. After an evaluation program, calcining followed by pneumatic attrition was chosen as the process flow of choice. Payback for this project was 2.1 years with an IRR of approximately 47%.

FIGURE 6- CORE SAND TO CORE SAND FOUNDRY

GENERAL DESCRIPTION
Foundry Type Product Type Sand Type Sand Usage Year Started Capacity (tph, tpy) Actual Production (tph, tpy) Yield (%) Beneficial Reuse (%) Disposal (%) Starting Product Ending Product Description of Reclamation System Purchased during Project Semi-Permanent Mold Aluminium Cylinder Heads and Intake Manifolds Silica, 43 & 52 AFS GFN 150 tpd 1986 8 tph; 46,000 tpy 6.3 tph; 36,000 tpy 92.0% 0.0% 8.0% Cold-box Cores Cold-box Cores Lumpbreakers, Calciners, Fluidized Cooler Beds, Recuperator, Dust Collection, Sand Sifters, Pneumatic Transport, Controls, Installation and Spares.

ECONOMIC EVALUATION
Initial Investment 5,074,164 DM(1) DM/t Cost of New Sand (per t) Cost of Disposal (per t) Total Cost of Sand (per t) 89.10 69.66 158.76 $4,400,000(2) $/t $77.48 60.57 $138.05

COST OF OPERATION Labor Electrical Gas Total Direct Maintenance Fixed (3) Total Indirect Disposal Costs (4) Credit for Energy Savings Credit for Resin Savings (5) New Sand Costs (4) Total Operating Costs Depreciation (6) Interest (7) TOTAL COST NOTES: (1) Based on 1991 paper. Costs expressed in paper in US$. Conversion to DM at US$1.00=1.62DM. (2) Conversion done at $1.00=1.15DM. (3) Assume depreciation and interest not included in this number. (4) At reported new sand and disposal costs, and yield, separately calculated Disposal Costs are 5.57DM and New Sand Costs are 7.13DM. Spreadsheet shows reported values, unmodified. (5) As described in the text of a 1991 paper. (6) Second column calculated at 10 years, 0% salvage, straight line method, full absorption of cost. (7) Calculated simply at 8%/year based on total investment. 12.47 1.18 8.76 22.41 11.57 33.74 45.31 3.24 -11.15 -5.67 8.59 62.73 0.00 0.00 62.73 $10.84 1.03 7.62 19.49 10.06 29.34 39.40 2.82 -9.70 -4.93 7.47 54.55 12.26 9.80 $76.61

10

11

FIGURE 8- GREEN SAND TO CORE SAND FOUNDRY GENERAL DESCRIPTION

Foundry Type Product Type Production Rate Sand System Size Typical Sand to Metal Ratio Sand Type Sand Usage Year Started Capacity (tph, tpy) Actual Production (tpy) Yield (%) New Sand: Reclaimed Sand Beneficial Reuse (%) Disposal (%) Starting Product Ending Product Description of Reclamation System Purchased during Project Copper Based Green Sand Plumbing Goods 9.1 t/shift of Castings 225 t 15:1 Sub Angular Lake, 85 AFS GFN 35 t/hr 1989 .61 tph; 3600 tpy 2400 tpy 75.0% 25:75 5.0% 20.0% Green Sand with Shell Sand and PUC Cores Phenolic Urethane Cold-box (PUC) Cores Sand crusher, thermal calciner, pneumatic scrubber, dust collection, material handling

ECONOMIC EVALUATION
Initial Investment
US$900,000 US$/t (1) 22.88 277.20 300.08 $1,224,490 $/t (2) $31.13 377.14 $408.27

Cost of New Sand (per t) Cost of Disposal (per t) Total Cost of Sand (per t)

COST OF OPERATION Labor Electrical Gas Total Direct Maintenance Misc. Fixed Total Indirect Credit for Metal Recovery Disposal Costs New Sand Costs Total Operating Costs Depreciation (3) Interest (4) TOTAL COST NOTES: (1) Adjusted cost to reflect costs per ton of 75.0% reclaimed sand and 25.0% new sand addition. (2) Conversion done at $1.00= US$.735. (3) Calculated at 10 years, 0% salvage, straight line method, full absorption of cost. (4) Calculated simply at 8%/year based on total investment.

\/ \/ \/ 13.53 23.46 0.92 24.38 -10.42 55.44 5.72 88.65 37.50 30.00 156.15

\/ \/ \/ $18.41 31.92 1.25 33.17 -14.18 75.43 7.78 120.61 51.02 40.82 $212.45

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Thermal/attrition systems to bring green sand to core sand quality are not limited to copper based foundries. One US steel foundry utilizes a 5.45 tph calciner to reclaim mixed incoming sand (green and chemical) into product used for the production of alkyd oil urethane and furan molds/cores. This 15,000tpy shop has been able to show a payback of less than three years. Increasing disposal cost as well as the shrinking availability of landfill space prompted this foundry to make the plunge into reclamation.

CENTRAL SAND LAUNDRIES

In almost all cases, the magnitude of investment in reclamation equipment, people, and time is not insignificant to the investing foundry. Foundries, not typically being "cash cows," have looked for alternate ways to avoid making this investment themselves and still address the need to have their sand reclaimed. A few entrepreneurial businesses have sprung up to "launder" the sands of local foundries. Therefore, the foundry can have some benefits of reclaimed sand without the technical, management, and investment burdens. Two of the most discussed sand laundries are Technosilica in Japan and Halbergerhtte in Germany. The first central laundry to be reviewed is Technosilica. Several items regarding this facility are most interesting. First, the calciner is the largest unit currently in production, rated at 16 tph. It runs, as most calciners, twenty-four hours per day. While the 85% yield may be considered not atypical, the amount of product ultimately going to landfill, 1.7% is. The company has done an outstanding job in finding beneficial reuses of the process by-products that are not suitable for foundry sand reuse. While the thermal-attrition process is used, most all reclaimed sand is used as feed product to produce shell sand. Although there are some reports cold-box cores have been/are being produced with the reclaimed sand, it is felt this represents only a very minor portion of production, at most. The quality of the end product may be insufficient to allow successful bonding of cold-box cores. Also, it is very important to note the plant is powered by coke gas and electricity that are subsidized by the adjoining NKK steel mill. This has very favorable operating cost benefits available to few. Also, of particular importance is the cost of delivered new sand, $137/t, and the cost of disposal, $110/t. With these costs the burden of proving financial payback is made easier! Besides the high cost of sand that helps economic justification, there is another key element of success at work at Technosilica. Over 70% of the sand reclaimed come from a single company, a sister company, Isuzu. This not only provides a steady, built-in customer, but always gives a substantial base of very similar sands to reclaim. The nemesis of a central sand laundry is many different incoming sands. The first column of Figure 9 gives the costs per ton of reclaimed sand at output as reported by Technosilica. In the second column the reported numbers have been adjusted to take out several accounting differences, an attempt to "level the playing field" by adding an electrical/gas surcharge, and to have the per ton costs reflect the impact of a 15% new sand addition to make up for production losses. Column three is, obviously, the conversion from Japanese Yen to Australian Dollars. This represents the cost of production f.o.b. sand plant (with or without profit included?).

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FIGURE 9- TECHNOSILICA CENTRAL SAND LAUNDRY GENERAL DESCRIPTION

Year Started Capacity (tph, tpy) Actual Production (tpy) Yield (%) Beneficial Reuse (%) Disposal (%) Starting Product Ending Product Description of Reclamation System 1989 16 tph; 120,000 tpy 107,000 tpy 85.0% 13.3% 1.7% Mixed- Green, Furan, Shell, Cold-box Primarily Shell Sand Complete facility-including process equipment, ventilation, dust collection, buildings, and installation. Thermal calcining followed by mechanical scrubber. Plant powered (gas and electricity) at subsidized rates by NKK.

ECONOMIC EVALUATION
Initial Investment 998,000,000 Yen Yen/t (1) 10,000 8,000 18,000 998,000,000 Yen Yen/t (2) 10,000 8,000 18,000 $13,708,791 $/t (3) $137 110 $247

Cost of New Sand (per t) Cost of Disposal (per t) Total Cost of Sand (per t)

COST OF OPERATION Labor Electrical Gas Electrical/gas surcharge (4) Total Direct Maintenance Building and Land General Administration Other Total Indirect Disposal Costs New Sand Costs Total Operating Costs Depreciation (5) Interest (6) TOTAL COST NOTES: (1) Based on 1991 paper by Technosilica. All costs per ton of final reclaimed sand at output. (2) Adjusted cost to reflect costs per ton of 85% reclaimed sand and 15% new sand addition. (3) Conversion done at $1.00= 72.8 Yen. (4) 50% increase of reported gas and electrical costs. (5) First column calculated at 7 years, 10% salvage, straight line method, full absorption of cost. Second and third columns calculated at 10 years, 0% salvage, straight line method, full absorption of cost. (6) Calculated simply at 8%/year based on total investment.

820 540 475 0 1,835 675 735 530 980 2,920 320 0 5,075 1,400 875 7,350

697 459 404 431 1,991 574 625 451 833 2,482 272 1,500 6,245 933 744 7,922

$9.57 6.30 5.55 5.93 27.35 7.88 8.58 6.19 11.44 34.09 3.74 20.60 85.78 12.82 10.22 $108.82

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Several words of caution are in order here. Comparing the economics of reclaiming sand between companies in different countries with different currencies is quite dangerous. Exchange rates can greatly affect the cost of reclaiming, as expressed in the foreign currency. And of course exchange rates have nothing to do with operating cost. Also, differences in culture, accounting methods, and company styles and interest all work against generating an economic evaluation that is perfectly comparable to one from another country. Another central laundry is highlighted in Figure 10, Halbergerhtte. There are many striking similarities between this facility and that of Technosilica-- 1) A variety of mixed sands enter the plant, but the primary finished product is shell sand, a binder system much more forgiving than cold-box resins; 2) The plant receives coke gas from steel mills in the Saarbrucken at a very favorable rate; and 3) Essentially 80-90% of the sand processed comes from one source, the Halbergerhtte foundry. But, there are dissimilarities. The plant apparently operates at about 70% of capacity, and is part of a foundry, not a separately operating business concern. Without a doubt this later difference significantly impacts costs, in particular indirect operating costs. While new sand and disposal costs are not as onerous as those found in Japan, Central Europe's costs are not insignificant, and increasing. Disposal costs, especially for those sands containing aromatics, can be very high. Also, available sites that will accept foundry waste sands are diminishing. With many foundries facing this economic quagmire in Germany, there is no small amount of wonder why the reclamation plant at Halbergerhtte isn't full of work. Really Halbergerhtte isn't a central sand laundry in the truest sense of the word. Product is not received, reclaimed for a price, and sent back to customers. The reclamation plant really is just a pre-treatment facility for raw materials entering the Halbergerhtte foundry. Sand is sent to the plant by other foundries to be processed at a cost to the foundries of 45 DM/ton. This is part of an agreement between Halbergerhtte and the Government by which a 3,000,000 DM subsidy was given in exchange for this tolling arrangement. After reclaiming, the sand is kept by Halbergerhtte. Not a bad deal. For roughly a variable cost of 30 DM, Halbergerhtte gets .72 t of reclaimed sand plus 15 DM left over. This isn't to say filling a real sand laundry is simple. To the contrary, it is extremely difficult. A central laundry would operate the smoothest if all incoming sands were similar in make-up-- distribution, GFN, additives, contaminants, etc. Different sands would require segregation, and separate processing, something difficult to do in a continuous operation. Also, different sands would behave differently under the operating conditions of the reclamation unit. Probably every foundry that has gotten into reclamation has found that their sands behaved differently than those that proceeded it. Consequently, the production economics for each foundry will be different. Another thing that significantly affects the ultimate cost of reclaiming through a central laundry is transportation to and from the reclamation site. In a study done by the author for a foundry considering building a reclamation site located just a few kilometers from their existing

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FIGURE 10- HALBERGERHUTTE CENTRAL SAND LAUNDRY

GENERAL DESCRIPTION
Year Started Capacity (tph, tpy) Actual Production (tpy) Yield (%) Beneficial Reuse (%) Disposal (%) 1989 10 tph; 71,000 tpy 50,000 tpy 72.0% 12-15% 13-16%

Starting Product Ending Product

Mixed- Green, Furan, Shell, Cold-box. Primarily Shell Sand, but some Cold-box for internal use only

Description of Reclamation System

Complete facility-including process equipment, ventilation, dust collection, buildings, and installation. Thermal calcining followed by mechanical scrubber. Gas at transmission cost from regional coke ovens.

ECONOMIC EVALUATION
Initial Investment 8,500,000 DM 8,500,000 DM $7,391,304

DM/t (1) Cost of New Sand (per t) Cost of Disposal (per t) Total Cost of Sand (per t) 28.50 57.00 85.50

DM/t (2) 28.50 57.00 85.50

$/t (3) $24.78 49.57 $74.35

COST OF OPERATION Labor Electrical Gas Gas surcharge (4) Other Utilities Total Direct 4.69 8.61 8.47 0.00 2.78 24.55 3.38 6.20 6.10 5.15 2.00 22.83 $2.94 5.39 5.30 4.48 1.74 19.85

Maintenance, Insurance, Reserves Lab,Forklift,Supervision,Overhead Transport Other Fixed Total Indirect

13.38 7.64 3.67 15.14 39.83

9.63 5.50 2.64 10.90 28.67

8.37 4.78 2.30 9.48 24.93

Disposal Costs Credit for Beneficial Reuse (5) Credit for Resin & Energy Savings Credit for Return of Fe Materials New Sand Costs Total Operating Costs

0.00 0.00 -14.31 -4.31 0.00 45.76

8.27 -1.35 -10.30 -3.10 7.98 53.00

7.19 -1.17 -8.96 -2.70 6.94 46.08

Capital Service (6) Depreciation (7) Interest (8)

35.50 /\ /\

0.00 17.00 13.60

0.00 14.78 11.83

TOTAL COST NOTES: (1) Based on 1991 paper by Halbergerhutte. All costs per ton of final reclaimed sand at output. (2) Adjusted cost to reflect costs per ton of 72% reclaimed sand and 28% new sand addition. (3) Conversion done at $1.00= 1.15DM. (4) Estimated increase in gas costs carried out at arm's length arrangement. (5) Guesstimate of a 10DM/t value. (6) Based on Capital Recovery Factor at 7% and 6 years. (7) Second and third columns calculated at 10 years, 0% salvage, straight line method, full absorption of cost. (8) Calculated simply at 8%/year based on total investment.

81.26

83.60

$72.69

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foundry, transportation costs were estimated in the $10.00/t range. In a Canadian study looking to build a central sand laundry to service local eastern Canadian foundries, transportation costs for possible participants ranged from $20-50/t! If a central laundry is to be considered, be sure to add in the cost of transportation and . . . a profit for the supplier. Central sand laundries appear to many as the verdant green pastures to their reclamation woes. While, perhaps, the investment can be spread across several foundries, the negatives of increased transportation and financial costs more than offset the gains. Whereas the technical and financial implications of a central sand laundry are substantial, the business and potential legal issues are even more formidable. Each foundry owner will have his/her own individual business concerns that need to be protected. Will you get back the sand you sent? What happens if lead contaminated sands are processed in the same facility and a lawsuit is brought, either by a private party or by a governmental agency? You could be become entangled in the litigation even though you don't use such sands. Indeed it is these issues that usually prevent the successful launch of a central sand laundry. Finally, there has been another reason that has stopped several sand laundries-- beneficial reuse. Easing of some regulations in some regions has opened up alternative reuse options for waste foundry sand. This has put discussions of central laundries in suspended animation. But, what the government give'th the government can take'th away, and the discussion regarding the proposed benefits of central sand laundries is not over.

PERFORMING A PROPER ECONOMIC EVALUATION

Beginning a complex financial evaluation can be a daunting task. This is compounded by the fact reclamation systems can also be rather complex, and often unique. Therefore, a sample analysis from another foundry probably cannot be used without at least some modification. Economic evaluations can be likened to engineering analyses. There are some data points that are critical to making a correct decision and these must be analyzed carefully. And there is other information that, while interesting, will not be significant enough to influence the investment decision one way or the other. Sometimes an educated guess is quite adequate and is more representative of reality than merely ignoring that particular line item. If there is some debate on just what a particular value might be, perform a sensitivity analysis using the anticipated range the variable may fall within. Often such an analysis shows that the financial returns are not as strongly impacted by the variability of the unknown as one might believe. Also, it is the differences between alternatives that are important in evaluating investment options, not necessarily the absolute numbers themselves. One always has to ask the question, "If I do this, how will it affect my cost (or my savings)?" Therefore, a good, solid understanding of your current costs before reclamation is vital in performing a proper financial analysis, and should be one of the first steps made. One tool that is quite valuable during the financial (as well as technical) evaluation is a mass flow balance in the form of a diagram. Figures 2, 4, and 7 represent such balances. These documents are important in understanding just how much of what is going where. It is surprisingly easy to miss or

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miscalculate a major element of flow if a simple mass flow diagram is not done. The diagrams used in this paper are very simple. In reality, these diagrams are much more extensive showing all ingredients in the sand, and all by-products. Also, do the mass flow diagrams both before and after the reclamation system is installed. At certain junctions on the mass flow diagram a stream of material is split and a certain portion goes one way and another portion goes somewhere else. Two very classical junction points are at the reclaiming units and at the point of new sand addition. Any properly operating reclaimer will have a yield less than 1.0. What the yield will actually be depends on a myriad of factors. While some estimates may be made, the only way to know for sure what the yield will be in your case is to test your sand in the reclamation units you are considering to buy. No other way will work. Reclaimed sand coming back to the foundry will then have to be tested to determine the appropriateness of the resultant cores/molds. If the mechanical properties are not appropriate, additions of new sand and/or changes to binder usage need to be made. New sand additions, if any, are then shown on the mass flow diagram and the flow can be balanced. Then correct sand usages can be used in the financial calculations. A word of caution is in order here. The use of percentages can be very misleading and dangerous in evaluating reclamation projects. Evaluators of projects must be very careful and fully understand just what numbers are used to calculate the ratio. Often the numerator is fairly well understood, but the denominator is just short of a mystery. Take for example yields. What is better, Scrubber A that has a yield of 80.0% or Scrubber B that has a yield of 88.8%? They could be the same. Imagine out of 100 kg, 10 kg of material is screened off the main sand stream before the scrubber and the scrubber removes 10 kg. Scrubber A could take the total mass flow of 100 kg as the denominator to the fraction and Scrubber B could take 90 kg. While the published numbers are both "right," they are not comparable. A mass flow diagram helps to eliminate these discrepancies, as does proper pre-testing of your sands. Because yield is such an important variable in the economic evaluation, a few more words may be in order. It has been reported yield is much more a function of the sand being reclaimed than upon the equipment doing the job. Therefore, sales literature statements are not comparable because, for almost certain, different sands were used to generate the yield numbers. Also, yield increases as the number of passes through an attrition type reclaimer increases until it stabilizes at some value. The first pass through a reclaimer produces the lowest yield. When a foundry tests its sand, care must be taken with the equipment supplier that the testing program produces the correct information upon which to make an economic evaluation. Another method of helping to avoid an improper economic evaluation is to have a team of people working together on the project-- a team that includes people of widely differing backgrounds. What might be a complete mystery to one person might be obvious to another. What may be assumed by a person close to a certain situation, and assumed wrong, may be questioned by someone not as close. A well lead team will usually make a superior decision as compared to a lone individual or two. On a more technical note, the analyses presented in this paper have taken a very simplistic approach to calculating the cost of the money needed to make an investment, a simple 8%/yr on the total investment cost. In reality, the cost of money is usually calculated at a much higher rate. Cost of capital in the 15-25% range is not uncommon. This rate varies widely company to company and depends on many things. Amount of borrowed money, amount of equity invested, cost of borrowed

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money, risk, foregone opportunity cost, et al. all impact the cost of money. Financial costs can often be nearly as expensive as operating costs. Because of the importance of this last statement the author repeats-- financial costs can often be nearly as expensive as operating costs. Ironically enough, almost every cost analysis in the literature completely ignores this extraordinarily important cost item. Owners of foundries won't. This paper also does not deal with any tax ramifications related to an investment in reclamation equipment because of the diversity of taxable situations. Property, business, and income taxes must be included in economic evaluations, because it is the money we all have after the government takes its share that really counts! The goal of a proper economic analysis is to strike an appropriate balance between investment and return. To quote a standard reference: "The fundamental question regarding a proposed investment in capital goods is whether the investment is likely to be recovered, plus a return commensurate with the risk and with the return obtainable from other opportunities for the use of limited resources. The purpose of calculations that involve the time value of money should be to answer this question." 2) The forgoing quote succinctly sums up the primary mission of financial analysis of capital projects. Again, the author has taken certain liberties in simplifying these analyses for the sake of this paper-dealing only with payback period (in years) and internal rate of return (IRR) using simplified cash flow streams. The use of payback as expressed in years is a simple and often used method of evaluating investments. It also can be misleading, sending a foundry down the wrong investment road. Payback is calculated by dividing the dollar benefit of a year's worth of operation into the total dollar investment. This is a very simple calculation that is worth just about as much as the time spent in calculating it. The most severe disadvantages to the payback method are that it does not consider the time value of money, and it discriminates against late maturing projects. While several possible techniques are available to effectively evaluate estimates, two of the most commonly used are internal rate of return (IRR) and net present value (NPV). It is beyond the scope of this paper to delve deeply into these techniques. Suffice it to say, both take into account the time value of money and can provide correct decision making information. IRR may be a bit more easy to understand and more useful in communicating your findings to people unfamiliar with financial analysis measurements. But, while each technique gives the same "accept/reject" decision for specific projects, under certain conditions, the two measurements can rank projects differently. If the projects under consideration are mutually exclusive or if capital is limited (and when isn't it), the ranking can be important. When ranking over two mutually exclusive alternatives, use NPV. For a complete discussion on the science of engineering economics, see Grant, et al. or a similar textbook on the subject. While the subject does require some initial "wading," the author strongly recommends at least one member on your reclamation team be fully knowledgeable on this important subject.
2)

Principles of Engineering Economy; Grant, et al.

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CONCLUSION
Unlike so many environmentally related investments, sand reclamation systems most often show a positive return on investment. Sometimes the returns are very handsome, depending on the local economic conditions facing the foundry. If sand reclamation doesn't make sense today, tomorrow it probably will. Over the past ten years in the US, the price of sand f.o.b. pit has advanced 50-80%, transportation costs have raised 125%, and disposal costs have increased 200-300%, if there is a place to dispose used foundry sand at all. No one, the author is aware of, is projecting a reversal of this cost trend. If you are not reclaiming today take the time to do a quick pro forma statement, even if it is on the back of an envelope over a lunch. While your estimates will inevitably be somewhat off, this quick rough-cut may suggest you should delve deeper into sand reclamation today. Foundries worldwide show a great deal of reluctance to making capital investments. Perhaps the size of the investment, the general low gross margins obtainable in the market, and the high volatility of sales volumes all combine to make this a very conservative industry when it comes to investment. While this is all very true, other outside factors (new sand cost; disposal regulations, cost and availability; competition; etc.) are working which will one day demand each surviving foundry seriously consider sand reclamation.

DISCLAIMER
The author has tried to portray fairly and professionally the economics of the various sand reclamation facilities covered in this paper. Information received through the various foundries and from publicly available sources has been analyzed and sometimes restructured in order to create comparable data, where possible. Although the foundries were forthright with information, certain paradoxes existed in the information provided. Every attempt has been made to rectify any such discrepancies. This paper has been presented with no attempt to prejudice the reader one way or another.

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BIBLIOGRAPHY
1) 2) 3) 4) 5) 6) 7) 8) 9) Green Sand Reclamation in Japan; Whiting, et al.; Canada Centre for Technology Report MTL91-12(TR); 1991. Mineral and Energy

Green Sand Reclamation in Europe; Whiting, et al.; Canada Centre for Mineral and Energy Technology Report MTL89-57(TR); 1989. Engineering Study to Determine Site and Capital Cost of a Central Sand Reclamation Plant; Merlin and Whiting; Canada Centre for Mineral and Energy Technology Report MTL91-72(TR); 1991. The Economics of Sand Reclamation as Opposed to Disposal; Rohr; AFS Transactions 78-147; 1978; Pages 495-500. Sand Reclamation: Is it Profitable for Your Foundry?; AFS Sand Reclamation and Reuse Committee; Modern Castings; December 1984; Pages 29-30. Sand Reclamation: A Final Feasibility Check; AFS Sand Reclamation and Reuse Committee; Modern Castings; March 1985; Pages 26-29. Planning for Thermal Sand Reclamation; Reier; AFS Transactions 84-59; 1984; Pages 347-354. Myths, Misconceptions, and Mistakes in Sand Reclamation; AFS Transactions 88-01; 1988; Pages 21-26. Hands-on Experience with Sand Reclamation in a Small Foundry; Petch; AFS International Sand Reclamation Conference Proceedings; 1991; Pages 175-189.

10) Outline of Reclamation Plant for Used Sand from Foundries; Aoki and Takeuchi; AFS International Sand Reclamation Conference Proceedings; 1991; Pages 191-210. 11) Mechanical-Thermal-Pneumatic Reclamation System; Bauch; AFS International Sand Reclamation Conference Proceedings; 1991; Pages 289-310. 12) Environmental and Economic Aspects of Sand Reclamation Systems, Kennedy and Linne, AFS 4th Annual Environmental Affairs Conference Proceedings; 1991; Pages 216-228. 13) Klein Process Equipment and Technology Brochure; 1991. 14) Principles of Engineering Economy; Grant, Ireson, and Leavenworth; John Wiley & Sons; 7th Edition; 1982. 15) Central Sand Laundry Economics; Whiting and Merlin; AFS Transactions 92-145; 1992; Pages 10491055. 16) Thermal Reconditioning of Core Sand in an Aluminum Foundry: A Contribution to Environmental Protection; Wesp and Engelhardt; AFS Transactions 91-22; 1991; Pages 227-235.

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